Economists Meet Jusuf Kalla to Discuss Impact of US-Iran Conflict
Several economists met with former Indonesian Vice President Jusuf Kalla at his residence in South Jakarta on Sunday evening, 8 March 2026, to discuss the economic impact of the United States-Iran conflict on Indonesia’s economy.
Among those in attendance were Paramadina University economist Wijayanto Samirin, University of Indonesia economist Vid Adrison, University of Indonesia economist Rizki Nauli, Bright Institute economist Awalil Rizky, Center of Economic and Law Studies (CELIOS) economist Nailul Huda, and Centre for Strategic and International Studies Executive Director Yose Rizal Damuri. Wijayanto Samirin stated that the purpose of the meeting with Jusuf Kalla was to broaden perspectives so that economists could provide policy recommendations according to the country’s needs.
“The economists had the opportunity to be received by Mr Jusuf Kalla because we see a dynamic economic situation, so we need to learn from someone with experience to gain a holistic view of Indonesia’s situation,” said Wijayanto to media representatives after the meeting.
Wijayanto also mentioned that economists transmitted policy recommendations through Jusuf Kalla in case he has the opportunity to meet with President Prabowo.
Vid Adrison, economist from the Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI), explained that one of the problems highlighted in the discussion was increasingly constrained fiscal space. He stated that the Middle East conflict could impact Indonesia through two avenues: rising energy prices and economic slowdown.
The government, Vid said, must respond to these two matters through budget reallocation towards more productive spending. “One option that could be considered is reconsidering the MBG (free nutritious meals programme),” he said.
Vid noted that MBG requires extraordinarily large budget allocation, approximately eight percent of the state revenue and expenditure budget (APBN). However, based on data from the National Socio-Economic Survey (Susenas), only fifteen percent of the population expressed concern about not having sufficient food. This means, Vid argued, that the government could save budget by focusing the MBG programme on the fifteen percent of the population who truly need it.
Meanwhile, Jusuf Kalla said that the current economic conditions are influenced by the global situation, previous policies, and current policies. However, what can be intervened is current policy. He assessed that when the APBN faces a large deficit, the solution is to choose financing that can advance the nation as well as increase revenue.
According to Jusuf Kalla, the government needs to prioritise budget for productive programmes that can boost economic growth. “MBG is important, buying defence equipment is important, cooperatives are important. But there are things that are even more important,” he said.
Earlier, Finance Minister Purbaya Yudhi Sadewa stated that the government would take cost-saving measures to ensure the fiscal deficit does not breach three percent of Gross Domestic Product (GDP) amid the current geopolitical situation. According to Purbaya, the APBN deficit could reach 3.6 percent if world crude oil prices reach US$92 per barrel.
The Finance Minister stated that this scenario will only occur if the government does not undertake intervention. Therefore, the government is considering cost-saving measures in several spending categories, including the free nutritious meals programme. “If that is the case, we will take steps to prevent it from happening. Where could savings be made? For example, savings in MBG,” said Purbaya at his office on Friday, 6 March 2026.
Purbaya explained that the savings would target spending that does not provide direct support for food distribution. He gave the example of purchasing motorcycles or computers for the Nutrition Fulfilment Service Unit (SPPG).